Boeing, machinists union open contract negotiations

Boeing also is proposing higher pay rates for entry-level workers for the first time in 16 years to bring it in line with what other employers offer. Kight said Boeing is not proposing a raise for the 70 percent of union workers who have reached the top of the IAM's pay scale, a level Kight said is in line with the market.

The bottom of the pay scale has languished while union workers received increases as recently as 2004 because few entry-level Machinists were hired during a period in which Boeing laid off and then recalled thousands of union workers.

The company is also considering incentive plans offering extra pay for improving productivity. Such plans already cover other groups of Boeing workers.

Citing a 7-percent annual increase in health care costs, Kight said Boeing is asking the Machinists to accept a modest increase in what workers pay for coverage and elimination of early retiree medical benefits for new hires who retire before age 65.

The union has threatened to strike over the company's pension demands. Tom Wroblewski, president of Machinists Union Local 751 in Seattle, said in an interview Friday that pay and health care details were unsatisfactory as well.

"They're posturing to take away benefits that we've fought hard for," he said.

Wroblewski said Boeing's blockbuster earnings, most recently a 38-percent jump in profit to $1.2 billion in the first three months of 2008, should support more benefits for workers, not the cuts and higher costs Boeing proposes.

The union opposes the pension plan switch, he said, because a 401(k)) lacks protections against a stock market decline or poor investment choices by workers.

The union struck for 30 days over company demands to cut retiree medical benefits and other "takeaways" before agreeing to the current contract in 2005, Wroblewski noted.

"I can't believe they would come back again and want to talk about that," he said.